Wiz’s decision to back out of a deal with Google could significantly affect Microsoft and the broader tech landscape. The Israeli cybersecurity startup had been in negotiations with Google for a potential acquisition valued at $23 billion, but CEO Assaf Rappaport announced on Tuesday that the offer was declined. Rappaport stated that this “tough” choice allows Wiz to focus on reaching annual revenues of $1 billion and preparing for an IPO.
The potential acquisition would have strengthened Google’s cybersecurity division, especially following a major outage attributed to industry leader CrowdStrike last week. Wedbush analyst Dan Ives noted that concerns among investors and ongoing antitrust scrutiny led to the deal’s failure. Google has faced significant legal challenges from the Department of Justice regarding antitrust issues, recently concluding one of its two major trials.
Ives highlighted that the collapse of this acquisition could create “ripple impacts across the sector.” He suggested that Google will likely continue to enhance its cybersecurity capabilities, alongside Microsoft, which may seek to strengthen its own cybersecurity platform in the upcoming 12 to 18 months.
Microsoft had recently experienced negative attention after a widespread IT outage caused by a problematic update to CrowdStrike’s cybersecurity software. This incident led to numerous reports of issues among Microsoft users globally and disrupted various sectors, including businesses and governmental operations.
While Ives still regards CrowdStrike as a leader in cybersecurity, the recent outage indicates that there may be room for Microsoft to improve its security offerings, and the failed Google-Wiz deal could further pave the way for such enhancements.